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Kirk Rice Blog

2021 Budget – Download Your Free Summary NowWritten on March 4, 2021 by Kirk Rice LLP

While the pre-Budget Treasury leaking machine appeared to flag many of the Budget measures announced, the Chancellor still managed to produce some surprises on Budget Day.

As the number of people affected by Covid-19 now appears to be slowing as vaccines are rolled out, Mr Sunak was clear on the government’s intention to see out the next few months as lockdown eases with similar support for businesses and individuals. The existing pandemic schemes with which we have now become familiar – furlough, self-employment schemes, business loans and grants – have been extended through to the end of June or even beyond. He chose to spend big initially, announcing major investment incentives for companies in the next two years, adding further to the government debt mountain.

However, after companies have had their investment binge, the widely anticipated corporation tax rise then kicks in with a vengeance as the main rate leaps by 6% to 25% in just two years’ time.

Individual taxpayers did not escape paying their fair share either, with Mr Sunak reaching for the old stealth tax favourite of freezing bands, thresholds and allowances. The inheritance tax nil rate band, which was originally frozen at £325,000 in 2009, is not now due to increase until April 2026.

As a cornerstone of his ‘Plan for Growth’ for post-Brexit Britain, the Chancellor announced the launch of freeports, naming eight throughout England, from Teeside to Plymouth and South Devon. These will enjoy a range of tax benefits including full business rates relief, enhanced capital allowances and stamp duty land tax exemptions.

With the COP26 climate conference due to take place in Glasgow later this year, there were also a number of green initiatives. The first green government bond (a green gilt?) will be issued in the summer. Around the same time, National Savings & Investments will launch its own green savings product.

By then, of course, we all hope, the Chancellor perhaps even more than most, to have turned the corner of the last pandemic year.

Don't miss out - Use your tax reliefs before 5 April 2020

With the end of the tax year just a few weeks away, we set out below some tax reliefs that you might wish to utilise so as to benefit from the tax savings that may arise before it is too late.

 

Some of the other highlights were:

  • The main rate of corporation tax will be increased to 25% from April 2023 for companies with profits of at least £250,000. At the same time, a new small companies’ rate of 19% will apply to companies with profits of up to £50,000.
  • For the two years from April 2021, companies investing in qualifying new plant and machinery will benefit from a 130% first-year super-deduction.
  • The personal allowance will rise to £12,570 and the higher rate threshold will be £50,270 for 2021/22 and both will then be frozen for the next four tax years.
  • The capital gains tax annual exemption, inheritance tax rate nil rate bands and pensions lifetime allowance will all be frozen at their current levels until April 2026.
  • The exemption from stamp duty land tax on the first £500,000 of residential property value will be extended to 30 June 2021 and then replaced by a £250,000 value exemption until 30 September 2021.

DOWNLOAD THE 2021 BUDGET SUMMARY

DOWNLOAD THE 2021/2022 TAX TABLES

We trust that you find the 2021 Budget Summary useful; if you have any questions about its contents or how any aspects of your tax and financial planning may be affected by the Budget, please get in touch by emailing info@kirkrice.co.uk so that we can put you in touch with the right specialist.

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